Stifel Financial Corporation · NYSE:SF
Stifel Financial — Q3 2014 Earnings Presentation
23 slides from Stifel Financial's earnings presentation, Nov 6, 2014
Slide 1: 3rd Quarter 2014 Financial Results Presentation
3rd Quarter 2014 Financial Results Presentation November 6, 2014
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve significant risks, assumptions, and uncertainties, including statements relating to the market opportunity and futu
Slide 3: Chairman's Comments
Chairman’s Comments “In the third quarter, we had record results in Global Wealth Management and solid results in Investment Banking. Our equity and fixed income brokerage businesses were impacted in the quarter by lower volumes, particularly in the month of August. On the positive side, market volu
Slide 4: Market Overview
Market Overview Market Valuations Rates Volatility / Volumes Flows Underwriting Volumes and M&A Equity Municipal U.S. U.S. U.S. 10yr Equity Corporate Mutual U.S. ECM U.S. DCM Bond DCM Announced Completed S&P 500 Dow Yield VIX ADV Bond ADV Fund ($) ($) ($) ($) M&A ($) M&A ($) 2014 Q3 1,972 17,043 2.4
Slide 5: Financial Results
Financial Results 4
Slide 6: Stifel Financial Corp. Results
Stifel Financial Corp. Results Three months ended September 30, 2014 Three Months Ended September 30, 2014 Three Months Ended (2) (2) ($ in thousands, except per share amounts) Non-GAAP Non-Core (1) GAAP 9/30/13 % Change 6/30/14 % Change Total revenues $ 536,241 $ (1,559) $ 534,682 $ 491,101 9.2% $
Slide 7: Q3 2014 Estimates - Core
Q3 2014 Estimates - Core Q3 2014 Mean $ Change % Change Revenues Commissions $ 151.6 $ 151.0 $ 0.6 0.4% Principal transactions 109.4 126.0 (16.6) (13.2%) Brokerage revenues 261.0 277.0 (16.0) (5.8%) Investment banking 120.1 128.0 (7.9) (6.2%) Asset management and service fees 96.6 97.0 (0.4) (0.4%)
Slide 8: Stifel Financial Corp. Results
Stifel Financial Corp. Results Nine months ended September 30, 2014 Nine Months Ended September 30, 2014 Nine Months Ended ($ in thousands, except per share amounts) Non-GAAP Non-Core (1) GAAP 9/30/13 (2) % Change Total revenues $ 1,664,072 $ (5,023) $ 1,659,049 $ 1,448,302 14.9% Interest expense 29
Slide 9: Non-Core Deal Costs
Non-Core Deal Costs Three Months Ended Actual Estimate ($ in thousands) 3/31/14 6/30/14 9/30/14 12/31/14 Acquisitions Acacia Federal Savings Bank $ 1,132 $ 2,259 $ 1,227 $ - De La Rosa & Co., Inc. 130 765 164 - Keefe, Bruyette & Woods, Inc. 709 480 23 - Knight Fixed Income 1,477 94 9 - Miller Buckfi
Slide 10: Source of Revenues
Source of Revenues Three Months Ended Nine Months Ended % % % ($ in thousands) 9/30/14 9/30/13 Change 6/30/14 Change 9/30/14 9/30/13 Change Commissions $ 151,621 $ 145,837 4.0% $ 152,712 (0.7%) $ 463,749 $ 446,498 3.9% Principal transactions 109,378 122,583 (10.8%) 125,676 (13.0%) 361,515 341,153 6.
Slide 11: Brokerage & Investment Banking Revenues
Brokerage & Investment Banking Revenues Three Months Ended Nine Months Ended ($ in thousands) 9/30/14 9/30/13 % Change 6/30/14 % Change 9/30/14 9/30/13 % Change Global Wealth Management $ 159,372 $ 158,085 0.8% $ 161,780 (1.5%) $ 482,657 $ 477,367 1.1% Institutional Group Equity brokerage 58,198 58,
Slide 12: Core Non-Interest Expenses
Core Non-Interest Expenses Three months ended September 30, 2014 Three Months Ended % of Net revenues (1) (1) ($ in thousands) 9/30/14 9/30/13 % Change 6/30/14 % Change 9/30/14 9/30/13 6/30/14 Net revenues $ 524,725 $ 479,634 9.4% $ 561,495 (6.5%) 100.0% 100.0% 100.0% Compensation and benefits 297,3
Slide 13: Core Non-Interest Expenses
Core Non-Interest Expenses Nine months ended September 30, 2014 Nine Months Ended % of Net revenues (1) (1) ($ in thousands) 9/30/14 9/30/13 % Change 9/30/14 9/30/13 Net revenues $ 1,634,655 $ 1,413,660 15.6% 100.0% 100.0% Compensation and benefits 946,755 826,314 14.6% 57.9% 58.5% (2) Transitional
Slide 14: Segment Comparison - Core
Segment Comparison - Core Three Months Ended Nine Months Ended % % ($ in thousands) 9/30/14 9/30/13 % Change 6/30/14 Change 9/30/14 9/30/13 Change Net revenues: Global Wealth Management $ 317,241 $ 274,669 15.5% $ 307,247 3.3% $ 921,671 $ 824,344 11.8% Institutional Group 215,160 205,132 4.9% 255,71
Slide 15: Global Wealth Management
Global Wealth Management Three Months Ended Nine Months Ended ($ in thousands) 9/30/14 9/30/13 % Change 6/30/14 % Change 9/30/14 9/30/13 % Change Commi s s i ons $ 108,154 $ 99,427 8.8% $ 107,438 0.7% $ 323,331 $ 306,089 5.6% Pri nci pa l tra ns a cti ons 51,218 58,658 (12.7%) 54,342 (5.7%) 159,326
Slide 16: Stifel Bank & Trust
Stifel Bank & Trust (an operating unit of GWM) As of 9/30/14 As of 9/30/13 As of 6/30/14 % Change Actual ($) Yield (%) Actual ($) Yield (%) Actual ($) Yield (%) Q314 v Q313 Q314 v Q214 Assets Cash 142,444 0.39 350,255 0.24 132,152 0.37 (59.3) 7.8 (1) Investment securities 2,720,860 2.39 2,949,080 2.
Slide 17: Institutional Group
Institutional Group Three Months Ended Nine Months Ended ($ in thousands) 9/30/14 9/30/13 % Change 6/30/14 % Change 9/30/14 9/30/13 % Change Net revenues $ 215,160 $ 205,132 4.9% $ 255,712 (15.9%) $ 720,849 $ 593,875 21.4% Compens ati on a nd benefi ts 131,589 119,874 9.8% 157,499 (16.5%) 443,104 35
Slide 18: Financial Condition
Financial Condition 17
Slide 19: Capital Structure
Capital Structure As of September 30, 2014 (in thousands, except ratios) ($ in thousands) Total Assets $ 9,326,117 Stockholders' Equity $ 2,238,549 6.70% senior notes, due 2022 $ 175,000 5.375% senior notes, due 2022 150,000 4.250% senior notes, due 2024 300,000 Debentures to Stifel Financial Capita
Slide 20: Interest Rate Risk Profile
Interest Rate Risk Profile PROJECTED INCREASE IN PRE-TAX EARNINGS FROM A 200 BPS RISE IN RATES ($ millions; as of September 30, 2014) Key Assumptions: $45 - 50 $60 - 70 (19 - 22%)* • Based on static balances on September 30, 2014 and an instantaneous change in rates • Ultimately, the amount earned b
Slide 21: Other Financial Data
Other Financial Data As of As of 9/30/14 9/30/13 % Change 6/30/14 % Change Total assets (000s): Stifel Nicolaus & Stifel Financial $ 4,365,545 $ 4,162,388 4.9% $ 4,524,976 (3.5%) Stifel Bank 4,960,572 4,547,071 9.1% 5,050,036 (1.8%) Total assets $ 9,326,117 $ 8,709,459 7.1% $ 9,575,012 (2.6%) Total
Slide 22: Acquisition Updates
Acquisition Updates Closed July 31, 2014 Full-service broker-dealer based in London Research, sales, trading and investment banking 23 analysts covering more than 260 UK companies in 9 industries Integration and conversion efforts scheduled for Q1 2015 Added approximately $4 million in incremental n
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